Leading Retail Association Doubles-Down on Pressuring American Retailers to Go Green

Atlanta, GA / Washington, D.C. - Free-market advocacy leaders at the National Center for Public Policy Research are praising Home Depot CEO Frank Blake for rejecting voluntary environmental regulations that could lead to mandatory private regulations that greatly damage American retail customers, suppliers and manufacturers.

Home Depot is a member of the Retail Industry Leaders Association (RILA) - a massive trade association promoting top-down sustainability mandates at the expense of American consumers. Also posing harm to manufacturers and suppliers, RILA presses these mandates on its members through conferences and annual sustainability reports.

[RILA] has launched a massive market and labor distorting campaign dubbed sustainability. Under the so-called sustainability campaign it is currently pressuring its members to make capital expenditures that often have limited prospects for reasonable return. RILA also advocates that its members lobby for changes in local building codes and infrastructure that will increase the cost of buildings and result in significant restrictions on property use. Finally, RILA is advocating top down sustainability standards that go beyond its own members affecting the entire supply chain despite the likelihood that these standards will increase suppliers costs and in turn the cost of the goods that they sell. As a shareholder our concern is that this push for so-called sustainability will harm Home Depot's shareholders, suppliers and customers, as they will bear the associated costs.

Ridenour then asked Blake:

Measures that expand growth and sales are good for Home Depot and the nation, those that don't, are not. Where does management stand on the question of its trade association imposing sustainability standards on its members including Home Depot? Does management support the idea of RILA imposing such standards or is it opposing mandatory sustainability standards and standing up for the right of each retailer to make its own decisions regarding the best way to lawfully and ethically satisfy the needs of its customers and shareholders?

Blake assured Ridenour at that time that Home Depot would not pursue green initiatives that may harm customers or the company's bottom line - a point he drove home when Ridenour met privately with Blake and members of the Home Depot executive team immediately following.

Since the Home Depot shareholder meeting, RILA has doubled-down on its radical environmentalist efforts by publishing its "2013 Retail Sustainability Report," in which it states:

Companies will often develop individual or industry voluntary programs to reduce the need for government regulations. If a retail company minimizes its waste generation, energy and fuel usage, land-use footprint, and other environmental impacts, and strives to improve the labor conditions of the workers across its product supply chains, it will have a competitive advantage when regulations are developed.

"In its most recent sustainability report, RILA gives away the game - that they hope to operate as if they were an extra-governmental body able to place restrictions on its participants," explained Danhof. "RILA seems to be operating on the premise that more regulation and red-tape is the only way forward for the retail industry. Nothing could be further from the truth."

Redirecting retailers' behavior so as to achieve these environmental and social goals will often require "expertise not yet available within an organization." Forging a path forward will have retailers reach out to "nonprofits, academics, and governments, as well as to their suppliers, consumers, investors, vendors, and communities." RILA assures us that these "stakeholders" will provide "diverse perspectives that will accelerate sustainable innovation." Note that RILA puts nonprofits (shorthand for environmental and other approved pressure groups), academics, and governments ahead of consumers, investors, and suppliers as sources of the "expertise" it believes retailers need.

"Home Depot has a chance to take a leadership position and remain firm against RILA's regulatory overreach," said Danhof. "If left to its own devices, the free market produces sustainability measures that have cost savings such as efficient packaging and water reductions. A top down approach distorts the market and can harm every aspect of the supply chain from the design to the ultimate purchaser."

Starting in early 2012, National Center staffers began confronting the CEOs of five major retailers who are all members of RILA - Target, J.C. Penney, Bed Bath & Beyond, Gap and CVS Caremark - about their engagement with RILA. Through its Free Enterprise Project, the National Center demanded these corporate leaders explain how RILA's goals are consistent with their fiduciary duties to increase shareholder value, and explained how they could adversely affect customers.

And the retail industry took notice. Prominent retail writer Joan Verdon wrote an article detailing the National Center's work to expose RILA that appeared in more than a dozen major publications nationwide including Bloomberg Businessweek, the Minneapolis Star-Tribune and the Honolulu Star-Advertiser.

In early 2013, the National Center's Free Enterprise Project continued to pressure RILA members regarding their complicity with RILA's new monopoly agenda. Through the shareholder resolution process, National Center Chairman Amy Ridenour and Free Enterprise Project Director Justin Danhof, Esq. had conversations with top executives at Best Buy and received assurances that the company would not pursue any RILA initiatives that, in their view, contradict best business practices dictated by the free market.

Also in early 2013, Danhof asked Walgreens CEO Greg Wasson how much more a consumer should have to pay for retail products so that RILA members can push so-called sustainable goods. Totally flustered and baffled by the very simple question, Wasson became incoherent and was unable to answer or defend his company's sustainability practices in any meaningful way. Writing for the Motley Fool, Gene Koprowski praised Danhof's question at the Walgreens meeting, and warned would-be company investors, saying: "I agree that that is an excellent question to ask, and suggest that investors refrain from buying shares of Walgreens until CEO Greg Wasson can provide a solid answer to the query."

Last month, the National Center again called on Wasson to come clean about Walgreens' dealings with RILA. So far, Wasson remains silent.

Furthermore, at the 2013 Costco shareholder meeting, Danhof confronted company CEO Craig Jelinek and asked him if he would reject any RILA initiatives that would harm Costco's bottom line. Jelinek refused to answer.

Also last month, the National Center again urged Jelinek to rebuff any RILA plans that might cause harm to his company or raise prices. Like Wasson, Jelinek remains silent.

Also of note, at the Sears meeting in May 2013, newly installed CEO Edward Lampert appeared to reject any extra-regulatory mechanism of RILA saying in part that "[p]ersonally, I don't like coercive solutions. I think America is overregulated."

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